When the Australian Energy Market Operator (AEMO) released its 2026 Integrated System Plan (ISP) last week, it briefly highlighted the distribution network opportunities on offer.
The report suggested $600 million of investment was needed in distribution networks to help connect grid-scale generation and storage and support the integration of consumer energy resources (CER) such as rooftop solar and home batteries.
Within this, the need for voltage management was highlighted, with the potential to unlock 4 gigawatts of latent CER capacity through this means. This would require $214 million of investment.
Still, the 2026 ISP’s coverage of distribution networks was high level, with Ausgrid, Endeavour Energy and Essential Energy, distribution network service providers (DNSPs) which serve about a third of Australia’s population, taking a deeper dive into this often-overlooked industry segment.
In releasing the Distribution System Plan (DSP) Opportunities report, the three DNSPs detailed the $2–4.3 billion of opportunities on offer from maximising distribution-level opportunities across NSW – $1.6–3.4 billion of which sit in better utilising available capacity and $0.7–2.2 billion of which sit in unlocking CER.
In better utilising available capacity, the DSP Opportunities report makes a compelling case for local energy precincts. This includes leveraging initiatives such as Ausgrid’s Community Power Network (CPN) pilot.
“The Ausgrid CPN pilot, approved under the Australian Energy Regulator’s sandbox mechanism, will provide a real-world example of how a local energy precinct could operate in practice,” Ausgrid chief executive officer Marc England said.
“Set to be delivered in Mascot–Botany and Charmhaven, the Community Power Network is about making better use of our existing network infrastructure so more households can share in the benefits of the energy transition.”
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CPN will see commercial buildings, apartment complexes and households leverage higher feed-in tariffs and export surplus rooftop solar resources into the local community.
England said this would make rooftop solar a more viable opportunity.
“Commercial and industrial businesses have struggled to get value from filling their roofs with solar and selling surplus energy because current wholesale prices are driving the price of energy below costs,” he said.
“The Community Power Network pilot changes this by offering customers a higher price for solar. This higher price and earning potential changes the game, making it commercially viable to install rooftop solar purely to export it to others in the community.”
The pilot is expected to generate $28.3 million in benefits over three years, which will be shared with local solar generators and customers in the trial catchment areas.
Other opportunities outlined in the DSP Opportunities report include Generation Rich Zones (GRZs), areas which support the integration of utility-scale generation and storage projects, and distribution battery energy storage systems (DBESS).
Essential Energy’s Dubbo distribution project is an example of a GRZ, with network augmentation occurring to create new ‘Energy Hubs’, bolstering existing switchyards, substations, and sub-transmission lines. First energy from Dubbo is expected to come online this year.
DBESSs, which would be located deeper in the distribution network and closer to the customer, can play a critical role in time-shifting energy and helping to balance supply and demand.
Read the DSP Opportunities report.
